US Trade and Investment Policy in Transition: Strategic Implications for Global Business in 2026

Executive Summary

The year 2025 marked a decisive shift in US international trade and investment policy. The administration pursued a more assertive, transactional approach, relying heavily on executive orders and emergency authorities to advance economic and national security priorities. Tariffs became a central instrument, export controls expanded into new technology areas, sanctions programs were retooled, and a new framework for screening outbound investment in sensitive Chinese sectors began taking shape.

For global businesses, these shifts introduced significant uncertainty in sourcing, pricing, compliance, and investment planning. As 2026 unfolds, executives need to move beyond reactive compliance and embed trade policy analysis into corporate strategy, risk management, and capital allocation.

Introduction

Over the past twelve months, US trade and investment policy has moved away from multilateral engagement toward a more unilateral, leverage-driven approach. The administration’s agenda has been defined by tariffs, sanctions, export controls, and investment restrictions, all advanced through executive authority. This structural change reflects a broader reassessment of global commerce as a domain of strategic competition rather than cooperative economic integration.

For business leaders, the implications are profound. Trade policy is no longer a back-office concern; it now affects manufacturing footprints, supply chain architecture, market access, intellectual property strategy, and financial performance.

A Policy Framework Built on Executive Action

The current US approach to trade policy is characterized by speed and centralization. Executive orders, Section 301 investigations, Section 232 national security reviews, and emergency powers such as the International Emergency Economic Powers Act (IEEPA) have become the primary vehicles for policy change. Legislative deliberation has played a diminished role, leaving companies to navigate a moving target of regulations and directives.

This reliance on executive authority increases legal uncertainty. The Supreme Court is expected to rule on the use of IEEPA to impose tariffs, with a decision likely in early 2026. The outcome could reshape the legal foundation of recent tariff actions and potentially lead to refund scenarios for importers.

Tariffs as Structural Instruments

Tariff expansion in 2025 was more aggressive than many anticipated. Rates on Chinese goods rose sharply across multiple categories, and new sectoral tariffs affected steel, aluminum, automobiles, semiconductors, and other critical industries. While some increases were postponed or exemptions granted, the cumulative effect was to alter sourcing decisions and pricing models across the economy.

Tariffs are now used not only to protect domestic industries but also as negotiating leverage and as a tool to address perceived national security risks. This creates a more variable and unpredictable trade environment. Bilateral negotiations with major trading partners have produced region- and product-specific exceptions, but they have also introduced complexity in determining applicable duties, country of origin, and eligibility under trade agreements.

The pending USMCA joint review, scheduled to begin in July 2026, adds further uncertainty. Companies with North American value chains should prepare for potential renegotiation and greater rules-of-origin scrutiny.

Export Controls and Sanctions: Wider Reach, Higher Risk

Export controls have continued to expand beyond their traditional national security function. In 2025, controls were extended to cover advanced semiconductors, artificial intelligence technologies, and related equipment and inputs. The Entity List was also broadened to include affiliates of listed entities, although implementation is temporarily suspended for one year as part of a bilateral agreement. Companies should use this period to enhance compliance systems in anticipation of stricter documentation requirements.

Sanctions policy evolved as well. The administration terminated programs targeting Syria and the West Bank while intensifying pressure on Iran, North Korea, Venezuela, and Russia. Notably, in the fourth quarter, sanctions were imposed on two major Russian oil and gas companies, signaling a more targeted but still significant use of energy-sector leverage.

These measures increase the compliance burden for global enterprises. Companies must conduct more rigorous counterparty screening, monitor transactions across multiple jurisdictions, and reconcile potentially conflicting obligations between the US, the EU, and other partners.

Investment Restrictions and Supply Chain Pressures

The regulatory focus has increasingly extended to investment flows, particularly outbound investment in China’s sensitive technology sectors. New rules impose notification requirements and, in certain areas, outright prohibitions on US investment in Chinese companies supporting military-civil fusion or advanced technology development. These restrictions are reinforced by Inflation Reduction Act provisions limiting tax credits for renewable energy components linked to foreign entities of concern.

Supply chain due diligence has become a strategic imperative. Companies are reassessing their exposure to countries of concern not only for direct imports but also through suppliers, customers, and logistics partners. The National Defense Authorization Act passed in late 2025 includes provisions on both outbound investment and procurement of biopharmaceutical inputs from countries of concern, signaling a broader trend toward supply chain security regulation.

Operational and Strategic Impact

For multinational corporations, the operational consequences of these policy shifts are significant. Legal and compliance teams face rapidly changing rules, litigation risks, and a substantial backlog in government licensing and classification processing. This requires building greater flexibility into commercial contracts and giving more weight to trade risks in investment decisions.

Executives should expect continued enforcement activity in areas such as customs fraud, sanctions violations, and evasion of trade controls. The government’s focus on Chinese-origin goods transshipment and tariff circumvention means that robust supply chain verification is no longer optional.

Executive Insights: Building Trade Resilience

In this environment, trade strategy must become an integrated part of enterprise risk management. Key priorities for business leaders include:

• Scenario planning: Model multiple tariff, export control, and sanctions outcomes and assess their impact on cost, revenue, and market access.
• Contract flexibility: Renegotiate supply agreements to include contingency clauses, tariff-sharing mechanisms, and termination rights.
• Compliance modernization: Invest in automated trade management systems, expanded screening, and staff training.
• Government engagement: Monitor policy developments and participate in public comment and consultation processes where available.
• Locational strategy: Evaluate manufacturing and sourcing footprints in light of shifting trade agreements and national security restrictions.

The most resilient organizations will link trade policy monitoring to procurement, finance, and technology strategy, allowing rapid adjustment as new rules emerge.

Future Outlook: 2026 and Beyond

The trajectory established in 2025 is likely to continue through 2026, with US trade policy remaining dynamic and enforcement-oriented. Tariff policy may face legal limits depending on the Supreme Court decision, but executive action will likely shift to other authorities. Export controls will continue to target emerging technologies, and outbound investment screening will mature.

Supply chain restructuring is expected to accelerate as companies move beyond near-shoring toward more diversified, resilient sourcing networks. Governments will play a larger role in directing industrial investment, particularly in sectors tied to national security. For business leaders, the challenge is to balance short-term compliance with long-term competitive repositioning.

Companies that invest in policy intelligence and build flexible operating models will be better positioned to navigate this uncertain landscape. The era of stable trade rules has passed; the ability to adapt has become a core strategic competency.

Key Takeaways

• US trade and investment policy is now dominated by executive action, creating legal and operational uncertainty.
• Tariffs have become a structural feature of global commerce, affecting supply chain design and pricing across industries.
• Export controls and sanctions are expanding in scope, with a heightened focus on China and emerging technologies.
• New outbound investment restrictions require companies to review ownership structures and capital plans.
• Legal challenges, including a pending Supreme Court ruling on IEEPA tariffs, could reshape the policy landscape.
• Complete supply chain due diligence and flexible contracting are essential in the 2026 environment.

Sources

This article draws on the reference publication: “US International Trade and Investment: Key Shifts in 2025 and What Businesses Should Know for 2026,” by Morgan Lewis, available at: https://www.morganlewis.com/pubs/2026/01/us-international-trade-and-investment-key-shifts-in-2025-and-what-businesses-should-know-for-2026